Smith takes readers inside Goldman

The former investment banking executive sent shockwaves through Wall Street in March when The New York Times published his op-ed “Why I Am Leaving Goldman Sachs,” in which he argued the bank had developed a culture of disrespect for its clients, or “muppets.”

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In his new book, “Why I Left Goldman Sachs: A Wall Street Story,” Smith walks readers through the nearly 12 years he dedicated to the firm and attempts to shed light on the Goldman culture using anecdotes about the “demeaning” way interns are treated, how employees regularly get “smashed” with clients and how the bank’s view of its clients has changed over time.

POLITICO obtained an early copy of the book, which is set to publish Oct. 22.

Smith’s op-ed raised eyebrows in Washington as well, with supporters of financial reform using his tale of Goldman’s low opinion of its clients as a way to strengthen their case for the Volcker rule and other regulations.

The book doesn’t appear to contain any blockbuster revelations about Goldman’s business practices that could get the firm in trouble with regulators, and the stories of hard partying likely will not surprise many.

Reviews of the first chapter, which was made public earlier this week, have provoked some yawns. Some mocked an anecdote about a banker throwing out a cheese salad brought to him by an intern because he had actually wanted a cheese sandwich.

Goldman Sachs CEO Lloyd Blankfein said last week that he cringed at the expected “hoopla” surrounding the book but added he was “not really concerned.”

“I never spoke to Greg Smith. But we went over everything like crazy,” Blankfein told CNBC. “And frankly, we could find nothing.”

Below are some highlights from the book:

Clients as “muppets”

Smith claims to have kept a copy of the Goldman principles pinned next to his desk. The first one of these missions read: “Our clients’ interests always come first.”

But by 2006, when Goldman Sachs was showing amazing profits through proprietary trading, it was clear to Smith that the company was losing sight of this goal.

“The client increasingly came to be regarded as a counterparty, merely the other side of a transaction, rather than an advisee,” he writes. “Where this practice of proprietary trading ... turned morally ambiguous was when the firm changed its mind (or masked its intentions) and made a bet in the other direction from the client’s.”

By the time Smith arrived in London in 2011 to help start Goldman’s U.S. equity derivatives business in Europe (by then the bank had weathered a meltdown of the global financial system and was accused of having committed fraud during the subprime mortgage crisis), the firm was busy convincing clients to buy or sell options on big European banks such as SocGen, BNP Paribas and UniCredit, all while countries such as Greece, Portugal and Spain faced a serious debt crisis.

The idea was to advise clients to bet on the opposite outcome of what the firm believed would happen so it could profit by taking the other stance, he wrote.

“We must have changed our view on each of these institutions from positive to negative back to positive 10 times,” Smith writes. “I remember thinking, ‘How can we be doing this with a straight face? No thinking client would believe that conditions on the ground could change that frequently.’”